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What is the dollar price per euro

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Reference no: EM131567137

Question: An American bank A and a European bank E agree a currency swap. In n successive weeks w = 1, 2,...,n, bank A will buy $100 million worth of euros from bank E, at a price pw per euro determined by the spot exchange rate at the end of week w. After n weeks:

(a) How many euros will bank A have bought?

(b) What is the dollar price per euro it will have paid, on average?

Reference no: EM131567137

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